Positive Pay

Episode ID S3E02
August 22, 2023

In this month’s episode of Fraud Wise, we’re discussing check fraud and the important steps you can take to prevent check fraud losses. 

CoBank’s Check and ACH Debit Positive Pay is a great way to monitor payments, helping protect against altered and counterfeit checks. We’ll also discuss the importance of auto pay settings, the difference between commercial and consumer accounts, the review process and more. Tune in now!


Hello, this is CoBank’s Fraud Wise, helping you avoid becoming a victim of fraud.

Checks are inherently vulnerable, but CoBank customers still write thousands of high dollar checks every day.  

If you’re writing checks, you must be aware that they can be stolen directly from your mailbox or the recipient’s mailbox, or numerous places along the way. And although stolen checks are sometimes beyond your control, mailing your check from either a locked mailbox or through the post office is best practice to avoid checks being intercepted.

This topic leads us to a discussion of Positive Pay Fraud Protection Services for your transaction clearing account. These various services allow businesses to upload daily check issue files, which are used to compare with in-clearing checks. Discrepancies are presented as exceptions for the business to decision as PAY or REJECT. If exception items are not resolved by the daily deadline a default action kicks in and resolves all outstanding exceptions. 

Some customers may have their default action set to auto pay, without realizing the risks involved in this practice. This is a very dangerous option, which could lead to fraudulent items being inadvertently paid.  If you have auto pay set as your default and you don’t review exceptions in time, you’ll miss that small window of opportunity to reject an unauthorized payment – and it will automatically get posted.

And keep in mind...fraud protection regulations for commercial accounts differ significantly from consumer accounts. A business has a very short window to reject an unauthorized check or received ACH debit. This is the only way to ensure the funds will never leave the bank. 

Due to this very short return window, Positive Pay services are the ONLY effective protection against check fraud or unauthorized ACH Debit Fraud losses.

We encourage you to use Check and ACH Debit Positive Pay to monitor payments and help protect against the payment of altered and counterfeit checks, as well as unauthorized received ACH.

And again, make sure that you don’t set your default to auto pay to ensure that your exceptions are reviewed daily before the deadline in order to avoid payment fraudulent items.

It’s also important to note that every day a bank is open, exceptions must be renewed and resolved, so it’s crucial to have more than one employee with the ability to review and set exceptions. You should regularly review your permissions settings and inform CoBank of employee turnover. This could save you from potential losses due to check fraud. 

This has been CoBank Fraud Wise, helping you protect against fraud.